Legislature(2009 - 2010)BELTZ 211

04/16/2009 03:45 PM Senate LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Time Change --
Moved CSSB 60(L&C) Out of Committee
Moved SCS CSHB 108(L&C) Out of Committee
Moved SCS CSHB 177(L&C) Out of Committee
Moved CSHB 175(L&C) Out of Committee
Moved HB 222(TITLE AM) Out of Committee
Bills Previously Heard/Scheduled
     CSHB 177(L&C)-MARINE & MOTORIZED RECREATIONAL PRODUCTS                                                                 
4:47:16 PM                                                                                                                    
CHAIR   PASKVAN   announced   CSHB   177(L&C)  to   be   up   for                                                               
SENATOR THOMAS moved to adopt  SCS CSHB 177, labeled 26-LS0477\M,                                                               
for purposes of  discussion. There were no objections  and it was                                                               
so ordered.                                                                                                                     
RENNIEVA  MOSS, staff  to Representative  Coghill, sponsor  of HB
177,  said this  is a  consumer protection  bill. The  adopted CS                                                               
added language that was suggested  by Attorney General Ed Sniffen                                                               
that  mirrored  motor vehicle  lemon  laws  by adding  venue  and                                                               
jurisdiction language to the statutes.                                                                                          
4:49:33 PM                                                                                                                    
MS. MOSS  said she wanted  to review the  bill for them  and that                                                               
she  had a  couple  of amendments  for  their consideration.  The                                                               
first  section  clarifies  in  the  motor  vehicle  section  that                                                               
recreation vehicles, ATVs,  and snow machines will  be dealt with                                                               
in  a  new chapter,  which  is  AS  45.27,  known as  the  Marine                                                               
Products   and   Motorized  Recreational   Vehicle   Recreational                                                               
Products. First  it says that  a manufacturer  can't unreasonably                                                               
withhold consent of sale or  transfer if the transferee meets the                                                               
criteria and  agrees to  be bound  by all  the agreements  in the                                                               
dealership  agreement. It  also says  that a  manufacturer cannot                                                               
cancel or fail to renew an  agreement unless they have shown good                                                               
cause and  satisfy notice  requirements. It then  goes on  to say                                                               
that  notice   requirements  would   be  60  days   for  material                                                               
provisions of an agreement, but  in cases of fraud or insolvency,                                                               
that would result in cancelation of  the contract with only to be                                                               
a 15-day notice.                                                                                                                
It  also says  that  a  manufacturer cannot  decline  to renew  a                                                               
dealership  because  of the  death  or  incapacity of  an  owner,                                                               
specifically  if the  dealership was  not granted  solely on  the                                                               
qualification of the  owner. It defines "good  cause" and repeats                                                               
in  more specifics  how the  manufacturer would  have to  furnish                                                               
notification of cancelation or non-renewal.  The notice has to be                                                               
in  writing  by  certified  mail.   New  provisions  say  that  a                                                               
manufacturer cannot  coerce or  attempt to  coerce a  dealer into                                                               
dealership  agreements to  perform  unfair acts  -  one would  be                                                               
requiring a dealer to overstock.                                                                                                
It defines a  manufacturer's representative as an  employee or an                                                               
agent  of   the  manufacturer  and  goes   into  cancelation  and                                                               
repurchasing  by saying  if a  manufacturer cancels  or fails  to                                                               
renew a  dealer agreement without  good cause, that  dealer would                                                               
be  obligated  to purchase  back  the  new  product that  is  the                                                               
current  model  year and  the  previous  year and  that  includes                                                               
product parts that  have been listed in  the manufacturer's parts                                                               
book for two  years. The exceptions are if the  parts or products                                                               
have  been substantially  damaged or  altered and  the repurchase                                                               
price would be based on the dealers landed costs.                                                                               
The product warrantee section is  where the manufacturer promises                                                               
to provide  parts in a  reasonable timeframe for  warrantee work,                                                               
makes an obligation  to pay the authorized  dealer specific rates                                                               
for warrantee  work, and then  it makes some requirements  on the                                                               
dealer not to  misrepresent the warrantee and to agree  to do the                                                               
warrantee work  for the  manufacturer. Language  on page  6, line                                                               
21, sets  out the basis for  reimbursement and three ways  for it                                                               
to occur.                                                                                                                       
4:54:01 PM                                                                                                                    
Line  24  is  where  she  wanted the  committee  to  consider  an                                                               
amendment  that sets  out that  the manufacturers  shall pay  the                                                               
highest rate of  either what the dealer  would customarily charge                                                               
in  a non-warranty  service or  the  manufacturer's printed  flat                                                               
rate or in  the future a flat-rate manual that  has been produced                                                               
for the industry.  She asked them to consider that  this would be                                                               
the  case  if the  authorized  dealer  has certified  technicians                                                               
performing the warranty work. This is already common practice.                                                                  
Another area for them to consider  is whether language on page 7,                                                               
lines  2-7, is  the proper  wording. If  subsection 2  is already                                                               
considered  warrantee  work,  do  they have  to  be  specific  in                                                               
listing those services and reimbursement  for doing paperwork for                                                               
warrantee  work?  Now it  has  a  minimum  of  one hour  for  the                                                               
authorized  dealer  shop  standard   labor  rate,  which  is  the                                                               
mechanics  rate,  not  necessarily  the  rate  of  someone  doing                                                               
Next, she said,  timelines were set out for how  claims should be                                                               
submitted  and   how  manufacturers   could  address   them.  The                                                               
manufacturer  would have  30  days  to deny  the  claim and  give                                                               
written notice  as to why  they have denied  the claim or  to pay                                                               
it. If neither happens it is  assumed the claim has been accepted                                                               
and they will be charged interest until it is paid.                                                                             
4:55:59 PM                                                                                                                    
MS. MOSS said language at the  bottom of page 7 starts the "lemon                                                               
law." If  the dealer  and the  manufacturer have  made reasonable                                                               
attempts to  correct non-conformity of a  product unsuccessfully,                                                               
then the purchaser  of that product would submit  in writing what                                                               
the non-conformity is and then  request that it be repurchased or                                                               
replaced.  The  manufacturer  on  a  repurchase  would  refund  a                                                               
reasonable  amount of  money with  considerations for  deductions                                                               
for straight  line depreciation and  damages to the  product that                                                               
would reduce the  value of the product. It also  says if there is                                                               
a  lien holder,  then  he would  also  be taken  care  of in  the                                                               
4:56:59 PM                                                                                                                    
MS. MOSS said the exceptions  to a repurchase are fairly obvious.                                                               
If  the  manufacturer  or  dealer  can  prove  that  it's  not  a                                                               
nonconformity, that it's something that  the purchaser did to the                                                               
vehicle themselves,  for instance, by  letting it run out  of oil                                                               
or if  they let someone do  something to the product  that caused                                                               
the non-conformity.                                                                                                             
The  lemon  law states  specifically  that  if  there is  a  non-                                                               
conformity  to  that product  and  the  dealer has  attempted  to                                                               
repair  it three  or  more times  or  if the  product  is out  of                                                               
service  for repair  for a  total of  30 or  more days,  then the                                                               
purchaser  of the  product can  request  that it  be refunded  or                                                               
Article  3  is  the  consumer  protection  section.  It  requires                                                               
certain posting  of labor rates including  for non-warrantee work                                                               
and  certification of  technicians. It  also requires  a shop  to                                                               
notice  whether  employees are  paid  on  commission and  when  a                                                               
person brings a  vehicle or product in for repair  to furnish him                                                               
a written estimate of costs  of repair including parts and labor.                                                               
For  additional  work, they  have  to  contact the  customer  for                                                               
Content of  factory recalls  is a  notice to  the dealer  and the                                                               
consumer letting  them know that there  is a recall on  a certain                                                               
part and  when they can  expect that part  to be supplied  to the                                                               
dealer for repairs.  It goes into not allowing  a manufacturer to                                                               
resale a  product that  they have repurchased  because of  a non-                                                               
conformity unless they  provide full disclosure of it  to the new                                                               
4:59:44 PM                                                                                                                    
Miscellaneous  provisions say  that  other laws  and other  civil                                                               
procedures on the books still  apply; it's applicable to a dealer                                                               
and  a manufacturer  in  an agreement.  The  jurisdiction is  the                                                               
State of  Alaska. The venue  is the judicial district  closest to                                                               
the  dealer  that  sold  the  product. HB  108  doesn't  allow  a                                                               
manufacturer  to  use  an  affiliate  partnership  or  subsidiary                                                               
corporation to avoid this law. It  says that any part of a dealer                                                               
agreement that violates these sections of law would not apply.                                                                  
5:00:27 PM                                                                                                                    
SENATOR BUNDE  asked if a  provision in the  dealership agreement                                                               
section on page 11, line 30,  violates this chapter because it is                                                               
a way to get out of the consumer protection.                                                                                    
MS. MOSS  answered with an example  - if somebody doesn't  read a                                                               
lengthy contract,  a provision  says a  company has  the absolute                                                               
right and its  sole discretion to terminate the  agreement on 10-                                                               
days  written  notice.  That  provision  won't  apply  here,  but                                                               
violation of this  statute says 15 days notice can  be given with                                                               
cause and 60 days without cause.                                                                                                
MS. MOSS  said on  page 12,  line 25,  the definition  of "marine                                                               
product"  is  changed  in  the  CS  to  include  gasoline  motors                                                               
designed for recreation or commercial  use on water. Some members                                                               
raised  concerns   that  they  were  interfering   in  commercial                                                               
contracts  between fishermen  and  manufacturers. Diesel  engines                                                               
for fishermen are  bought directly from manufacturers  and have a                                                               
separate  warrantee provision.  Fishermen and  dealers have  told                                                               
her that  adding gasoline motors  would cover about  99.3 percent                                                               
of who they are trying to cover under this statute.                                                                             
5:02:28 PM                                                                                                                    
An  applicability  section  on  page 15  says  this  new  statute                                                               
applies to dealership agreements that  are signed after this bill                                                               
is enacted, and it has an immediate effective date.                                                                             
CHAIR  PASKVAN asked  if  it applies  to  renewals of  dealership                                                               
MS. MOSS replied yes - cancellation as well as renewal.                                                                         
CHAIR PASKVAN  asked the  industry standard  for term  of renewal                                                               
for any of the typical dealers in Alaska.                                                                                       
MS. MOSS said she didn't know, but some dealers would.                                                                          
5:03:24 PM                                                                                                                    
KATHY VAN KLEEK, Specialty Vehicle  Institute of America, opposed                                                               
HB 177.  She said it would  raise the cost of  doing business and                                                               
ultimately  increase   the  cost  of  recreational   products  to                                                               
Alaskans. They don't oppose  reasonable franchise legislation and                                                               
don't oppose many of the  bill's provisions. However, there are a                                                               
few very problematic provisions. One  is the requirement that the                                                               
manufacturer  reimburse the  dealer for  warranty service  at the                                                               
dealer's   retail  rate.   Some  manufacturers   do  have   cured                                                               
reimbursement  systems depending  on levels  of factory  training                                                               
that  a  technician has  completed.  This  encourages dealers  to                                                               
employ   the    most   highly   qualified    technicians,   which                                                               
significantly    benefits   consumers.    Requiring   the    same                                                               
reimbursement  for  all only  punishes  those  dealers who  spend                                                               
considerable  time  and  money  to   have  and  retain  the  most                                                               
qualified technicians.                                                                                                          
She said they would support  an amendment requiring an additional                                                               
hour's reimbursement for administration.                                                                                        
Another problematic  provision is the lemon  law requirement; the                                                               
language  lacks in  specificity and  off road  vehicles and  ATVs                                                               
should  not  be included.  Lemon  laws  were written  to  address                                                               
concerns  with the  automobile industry,  and almost  exclusively                                                               
every state law applies only  to motor laws operated on highways.                                                               
The ATV has  a number of unique factors  and inherent differences                                                               
from  cars that  don't make  sense with  lemon laws.  Off highway                                                               
vehicles are  not included  in the  National Conference  of State                                                               
Legislature's  Model  Lemon Law  either.  Use  patterns are  very                                                               
different from those of cars.                                                                                                   
MS. VAN KLEEK  explained that ATVs are used  for recreational and                                                               
utilitarian purposes, and are many  times subject to modification                                                               
and  extreme  use  and  abuse.  Many  are  used  for  competition                                                               
purposes,  and it's  seems  no more  appropriate  to cover  these                                                               
products under  a lemon  law designed  for cars  than it  does to                                                               
cover other products  such as household appliances,  all of which                                                               
are  covered  under  the  Uniform  Commercial  Code  that  offers                                                               
protection to buyers of defective products.                                                                                     
ATV manufacturers  view warrantee  repair policies  as investment                                                               
in good consumer relations and  future repeat sales. If customers                                                               
are  dissatisfied, they  simply  won't buy  another  ATV of  that                                                               
make. If  this provision were  enacted, good will  repairs, which                                                               
are not uncommon for manufacturers  to authorize, would end since                                                               
they would  be included in  the number of repairs  allowed before                                                               
the lemon law provisions would kick  in. Also ATV use is seasonal                                                               
and customers  may leave  their ATVs  for service  at dealerships                                                               
for extended periods of time.                                                                                                   
5:08:10 PM                                                                                                                    
But if  the law  requires replacement  or refund  if the  ATV has                                                               
been out  of service  for 30  days, that  practice would  end, as                                                               
well.  This   is  more  of   a  customer  convenience,   but  the                                                               
manufacturer's exposure would  overshadow the owner's convenience                                                               
and the  dealer's efficiency. They  don't believe that  the small                                                               
incidence  of  problems  in  this  area and  the  fact  that  ATV                                                               
manufacturers  are currently  acting in  a responsible  manner to                                                               
achieve customer  satisfaction justify  the downsides  that would                                                               
be brought about with the passage of a lemon law.                                                                               
5:08:28 PM                                                                                                                    
Finally, Ms.  Van Fleek  said, some terminology  in HB  177 would                                                               
lead to  confusion and  conflict. The bill  includes ATVs  in the                                                               
definition of  "recreational vehicles," but  recreational vehicle                                                               
is defined  elsewhere in Alaska  statute to mean motor  home type                                                               
vehicles and  they are subject  to numerous other types  of laws.                                                               
So,  she suggested  removing that  language. She  urged that  the                                                               
bill be amended to reflect these  needed changes and to give it a                                                               
more thoughtful review.                                                                                                         
5:09:29 PM                                                                                                                    
DAVID  DICKERSON,   National  Marine  Manufacturers,   said  they                                                               
represent  the recreational  boat  and  engine manufacturers.  He                                                               
said he needs  more time to review the significant  changes in HB
177 even though they seem to be good.                                                                                           
He cautioned  that the bill seems  to be based on  the assumption                                                               
that  dealers are  powerless against  boat engine  manufacturers.                                                               
That's not true  in Alaska where there are few  marine dealers. A                                                               
cancelation by a  dealer can push a boat brand  completely out of                                                               
a  market here,  because  he  doesn't have  anywhere  else to  go                                                               
unlike  in a  lot of  places with  competition. The  premise that                                                               
dealers need  the protection  from cancelation  is turned  on its                                                               
head in a state like Alaska.                                                                                                    
Secondly,  the  lemon law  doesn't  differentiate  very well  for                                                               
boats  that   are  an  assembly  of   components  with  different                                                               
warrantees quite  unlike other products under  consideration. The                                                               
definition  of  "part"  is  also  an  "accessory"  and  makes  it                                                               
difficult  to determine  who should  provide those  parts if  one                                                               
should fail.                                                                                                                    
As  far  as  the  repurchase  of a  vessel,  should  there  be  a                                                               
cancelation or  non-renewal, it doesn't  discuss at all  that the                                                               
boat should  have no  changes to it,  no additional  equipment or                                                               
other accessories  that may make it  substantially different than                                                               
the boat that  was shipped up to the dealer.  In addition to some                                                               
of  these things,  the idea  of  the parts  needed for  warrantee                                                               
repair is  somewhat unclear.  It says that  the dealer  should be                                                               
reimbursed at  full retail  for parts  used in  warrantee repair,                                                               
but  if that  part is  being sent  to the  dealer for  a specific                                                               
repair on a  specific unit, why should that  dealer be reimbursed                                                               
at full  retain rate for a  product that is dropped  at his door?                                                               
It's hard  to figure  out the  benefit in  having these  types of                                                               
mandates on private business.                                                                                                   
He understands that  not every unit coming off  of every assembly                                                               
line is absolutely perfect and  that's why warrantees exist; that                                                               
is why manufacturers  try hard to see that those  working on them                                                               
have the proper level of training.                                                                                              
5:14:27 PM                                                                                                                    
MR. DICKERSON said the marine industry  uses training as a way to                                                               
attain 110  percent of the  retail rate  as an incentive  to have                                                               
that  proper training.  Mandating that  they cannot  use that  as                                                               
incentive puts dealers into a double  bind. On one hand they have                                                               
to be  sure that repairs  are done  right and don't  exceed three                                                               
times of effort on the same  problem, but on the other hand, they                                                               
are not put  in the position of being able  to require that those                                                               
techs,  whether they  are  certified or  not,  have a  continuing                                                               
level of  education. It  will require them  to rethink  how techs                                                               
are certified  or how an  authorized repair  facility designation                                                               
is provided to a dealership. No  longer will that be an incentive                                                               
to have  the type  of training  that consumers  and manufacturers                                                               
MR. DICKERSON  echoed the concern  regarding the  additional hour                                                               
of payment  for each  warrantee repair claim.  Since much  of the                                                               
work is  done by  a lesser paid  individual at  most dealerships,                                                               
the  idea of  $110 for  each warrantee  claim for  administrative                                                               
expenses  seems excessive.  He reiterated  the request  that they                                                               
delay action to give involved  parties the opportunity to work on                                                               
the issue.                                                                                                                      
SENATOR THOMAS asked when he first became aware of this bill.                                                                   
MR. DICKERSON replied he became aware  of HB 303 in January 2008.                                                               
The bills have significant differences.                                                                                         
SENATOR BUNDE said one-hour of mechanic's time is too much.                                                                     
MS. MOSS said she was hoping  to get feedback from the dealers on                                                               
a reasonable amendment.                                                                                                         
5:18:20 PM                                                                                                                    
KEVIN  HITE,  President,  Alaska  State  Snowmobile  Association,                                                               
supported  HB 177.  He  stated that  several  levels of  consumer                                                               
protection  are  in  place  for   vehicles  in  Alaska  that  are                                                               
currently titled under DMV regulations,  and HB 177 would provide                                                               
some of the  non-road titled vehicles a good measure  of the same                                                               
protections. Automotive dealers  do such a good  job of repairing                                                               
vehicles because their consumer  protection level for them insure                                                               
that they get  reimbursed at a rate equal or  greater than repair                                                               
work.  Automotive dealers  are not  losing money  on repair  work                                                               
regardless of where the original sale of the truck was.                                                                         
He  said that  snow  machines, primarily,  don't  enjoy the  same                                                               
level  of support  in  the  warranty arena  from  the OEM  dealer                                                               
system. Losing money  on a current customer is  one thing; losing                                                               
money  on someone  else's customer  is not  incentive for  either                                                               
one. If  a customer is outside  the road system, that  could mean                                                               
an expensive shipping bill to  return the machine to the original                                                               
dealer.  He explained  that there  have been  issues with  models                                                               
still used  in Alaska that the  OEMs have not fixed  and this has                                                               
been ignored in  large part due to the fact  that the market here                                                               
is small.                                                                                                                       
The fact  that snow mobiles  are the main mode  of transportation                                                               
for much  of Alaska makes those  same issues huge in  the overall                                                               
picture.  Dealers here  are aware  of manufacturing  problems and                                                               
many times  don't have a whole  lot of support from  the OEMs who                                                               
focus more on models that sell a  whole lot more in the Lower 48.                                                               
Holding  OEMs  responsible for  liability  on  vehicles that  are                                                               
critical to  our way  of life  regardless of  geographic location                                                               
will result in  a lot better operating and  designed vehicles for                                                               
Alaska. This  legislation will provide protections  for consumers                                                               
and local businesses as well.                                                                                                   
SENATOR  BUNDE said  the one-hour  reimbursement of  a mechanic's                                                               
time for paperwork seems excessive. Would he have a suggestion?                                                                 
MR. HITE  answered that those  decisions are primarily  driven by                                                               
the  work load  that comes  in. Some  warranty work  is extremely                                                               
simple; some  will be quite  involved. The  administrative effort                                                               
to get the warranty work  correct may dictate different levels of                                                               
that. He would rely on the  dealers for the information to verify                                                               
what actually went  in to some warranty work. He  couldn't make a                                                               
different recommendation.                                                                                                       
5:23:35 PM                                                                                                                    
DUDLEY BENESCH,  Alaska Mining and Diving,  Alaska Marine Dealers                                                               
Association,  supported  HB 177.  He  said  their association  is                                                               
comprised of 28 member businesses  and dealers throughout Alaska,                                                               
and have been  working hard on the issues addressed  in this bill                                                               
for a lot of years.                                                                                                             
They researched a study of what  other states had done and HB 177                                                               
has been crafted to address many  of special needs of the Alaskan                                                               
consumers  and the  market up  here; it  has very  broad support.                                                               
Elsewhere a  snow machine  might be  a toy,  but in  Alaska these                                                               
products are the  primary mode of transportation or  the means to                                                               
earn  a  living,  especially  in  the  rural  areas.  Safety  and                                                               
dependability are key issues for their customers.                                                                               
In 2008 as  a dealer, Mr. Benesch said, he  invested over $37,000                                                               
in  sending  technicians  to specialized  schools  to  keep  them                                                               
certified and current on the  changing technology and sending his                                                               
management folks  to mandatory dealer  meetings in the  Lower 48.                                                               
In  addition, his  dealership spends  many  thousands of  dollars                                                               
each  year purchasing  new software,  hardware and  special tools                                                               
needs  to fix  everything  they sell  and  to do  a  good job  at                                                               
repairs.  These   are  significant   investments  that   they  do                                                               
willingly  to  insure that  customers  get  good help.  What  has                                                               
become  more  difficult  is  that more  and  more  products  have                                                               
warranty  and  significant  defects  and those  costs  are  being                                                               
shifted  on to  the  dealerships.  The products  seem  to not  be                                                               
tested properly  and are maybe  rushed to  market to try  and get                                                               
the edge on the competition. In  essence HB 177(SB 173) will hold                                                               
those who  create a problem  more accountable for the  real costs                                                               
to fix the problem.                                                                                                             
MR. BENESCH said  that his dealership has  one full-time employee                                                               
whose whole job is just to  handle the paperwork and details that                                                               
are required  for a warranty claim  to get paid to  a dealership.                                                               
Warranty administration has become very complex.                                                                                
5:28:54 PM                                                                                                                    
CHAIR PASKVAN asked if one  hour is reasonable for administrative                                                               
MR.  BENESCH answered  the problem  is  that some  jobs are  more                                                               
complex than  others. So they looked  at a sampling and  tried to                                                               
come up with  an average. Without any doubt  whatsoever, one hour                                                               
is realistic for administrative costs.                                                                                          
SENATOR BUNDE asked how much one hour would cost.                                                                               
MR. BENESCH replied $110. Others charge from $80-$120.                                                                          
5:31:13 PM                                                                                                                    
DAVE MCCORMICK,  owner, Back  Creek Marine,  said that  people in                                                               
Bethel depend on these recreation  vehicles and supported HB 177.                                                               
They are  used for  rescue, getting wood,  catching food  and are                                                               
the main  means of transportation.  People spend the  better part                                                               
of a year's  family's income to buy  one vehicle. Kuskokwim/Yukon                                                               
Delta  consumers rely  on his  shop to  repair their  defects and                                                               
keep them going after they  are off warranty. Normally they can't                                                               
afford to fix them after the  warranties are over. However, he is                                                               
losing so  much money  and may  be going  bankrupt because  he is                                                               
covering expenses  that the manufacturers should  be covering for                                                               
warranty work that he does. It's  vital to pass this bill for his                                                               
people's sake.                                                                                                                  
5:36:26 PM                                                                                                                    
CRAIG COMPEAU, Compeau's Inc., supported  HB 177. He said that he                                                               
feels one  hour reimbursement is conservative  for administrative                                                               
costs in a  real world basis. It is for  things like greeting the                                                               
customer,  writing   up  the  service  order,   transporting  the                                                               
vehicles  in and  out of  the  shop, ordering  parts, filing  the                                                               
claim,  contacting customer  service,  returning parts,  tracking                                                               
the  parts  and tracking  the  reimbursement.  He figures  it  is                                                               
actually closer  to 1.3 hours.  People don't realize  that retail                                                               
service work gets bumped when they  are having to work on factory                                                               
defects at a subsidized rate. "It's not fair."                                                                                  
5:38:31 PM                                                                                                                    
CHAIR PASKVAN closed public testimony.                                                                                          
SENATOR BUNDE moved to adopt Amendment 1 labeled 26-LS0477\M.2.                                                                 
                          AMENDMENT 1                                                                                       
OFFERED IN THE SENATE                                                                                                           
     TO:  SCS CSHB 177(   ), Draft Version "M"                                                                                  
Page 6, line 24:                                                                                                                
     Delete "A"                                                                                                                 
     Insert "If the technician performing the warranty service                                                                  
work  meets   the  certification  standards  in   the  dealership                                                               
agreement, a"                                                                                                                   
SENATOR MEYER objected for discussion purposes.                                                                                 
MS. MOSS  explained that it  addresses one of  the manufacturer's                                                               
concerns  on page  6, line  24, that  if they're  going pay  full                                                               
retail non-warranty  rates for  warranty work,  that the  work is                                                               
done by  certified technicians. This  inserts "if  the technician                                                               
performing  the warrantee  service work  meets the  certification                                                               
standards in the dealership agreement,  a manufacturer shall pay"                                                               
and then goes to the pay scale.                                                                                                 
SENATOR MEYER removed his objection and Amendment 1 was adopted.                                                                
5:40:18 PM                                                                                                                    
SENATOR BUNDE moved to adopt Amendment 2, 26-LS0477\M.3.                                                                        
                          AMENDMENT 2                                                                                       
OFFERED IN THE SENATE                                                                                                           
     TO:  SCS CSHB 177(   ), Draft Version "M"                                                                                  
Page 7, line 8, following "parts":                                                                                              
     Insert "in the authorized dealer's inventory"                                                                              
Page 7, lines 9 - 10:                                                                                                           
     Delete "and shall ship each part to the authorized dealer                                                                  
without cost for freight or handling"                                                                                           
SENATOR MEYER objected for an explanation.                                                                                      
MS. MOSS explained that this amendment  is on page 7, line 8, and                                                               
clarifies something  Mr. Dickerson  addressed. It  clarifies that                                                               
when a manufacturer pays a dealer retail  for a part, it is for a                                                               
part  that the  dealer has  on his  shelf in  his inventory.  The                                                               
second  part deletes  lines 9-10  because it's  a duplication  in                                                               
wording that is already discussed on page 5.                                                                                    
5:41:49 PM                                                                                                                    
SENATOR MEYER removed his objection and Amendment 2 was adopted.                                                                
5:42:01 PM                                                                                                                    
MS.  MOSS  said  the  purpose  of   language  on  page  1  is  to                                                               
distinguish between a recreational vehicle  that could be a motor                                                               
home, an all-terrain vehicle, or  a snow machine, and these would                                                               
be  regulated under  the new  Chapter 27.  She stated  that these                                                               
vehicles  are often  the only  means of  transportation for  many                                                               
Alaskans and should be covered by a lemon law.                                                                                  
SENATOR  BUNDE  asked on  page  3,  lines 15-16,  about  allowing                                                               
immediate cancelation upon bankruptcy or felony conviction.                                                                     
MS.  MOSS  answered that  her  only  concern is  that  bankruptcy                                                               
requires court proceedings, and she  wasn't sure what effect that                                                               
would have.  She didn't  think the sponsor  would have  a problem                                                               
with reducing that notification period.                                                                                         
CHAIR PASKVAN commented  that 15 days is a  relatively short time                                                               
in the scheme of things.                                                                                                        
SENATOR BUNDE said  he was wondering about  "things wandering out                                                               
the back door."                                                                                                                 
5:45:10 PM                                                                                                                    
SENATOR THOMAS  moved to report  SCS CSHB 177(L&C), version  M as                                                               
amended,  from  committee  with  individual  recommendations  and                                                               
attached fiscal note(s).                                                                                                        
SENATOR BUNDE commented that he  was concerned that adopting this                                                               
bill  might discourage  manufacturers from  selling ATVs  up here                                                               
because  Alaska  is  a relatively  small  market.  Testimony  has                                                               
indicated that they  are designed for occasional  use about three                                                               
months a  year and Alaskans use  them every day for  six months a                                                               
SENATOR MEYER objected for discussion.                                                                                          
SENATOR THOMAS noted a zero fiscal note.                                                                                        
SENATOR MEYER removed  his objection and SCS  CSHB 177(L&C) moved                                                               
from committee.                                                                                                                 

Document Name Date/Time Subjects